Indigenous groups sign agreements for stake in Coastal Gaslink

Two groups representing the interests of more than a dozen First Nation communities along the Coastal Gaslink pipeline route have signed option agreements to acquire a 10-per-cent stake in the $6.7-billion project in northern British Columbia.

The equity option for Coastal Gaslink, which is still under construction, will be exercisable once the pipeline is commercially in service sometime in 2023. The agreements announced Wednesday would allow First Nations groups to become owners in Coastal Gaslink alongside the Alberta Investment Management Corporation (AIMCO), private equity giant KKR and TC Energy. The pipeline, which will eventually connect B.C.'S shale gas resources to LNG Canada's export project in Kitimat, has sparked demonstrations and blockades from environmentalists and some First Nations groups since construction began in 2019.

TC Energy had previously set aside a 10 per cent stake in the project for potential sale to Indigenous communities across the pipeline corridor.

Wednesday's announcement encompassed a total of 16 First Nation communities, represented by two entities, which have now acquired the ownership option set aside by TC.

The project has faced demonstrations and opposition from environmentalists and some First Nations for several years. Some of the groups say the project will trespass over their traditional lands.

Last month, the pipeline work camp was attacked by what police described as assailants brandishing axes threatening workers and damaging equipment.

A bid by one of the two entities to acquire a further 10 per cent stake in the project in 2019 was attempted but ultimately fell apart over difficulty in accessing capital.

Barry Vickers, vice-president of the CGL First Nations Limited Partnership and member of the Saik'uz First Nation, said when his group encountered difficulties accessing financing, they tried approaching the provincial and federal governments about the possibility of loan guarantees or direct loans but weren't successful.

“We worked really hard at acquiring another 10 per cent, and had the opportunity to acquire another 10 per cent, but access to capital really sort of got in our way. It became a real barrier,” Vickers said in an interview with the Financial Post. “Raising the level of capital required for that extra 10 per cent within a relatively short time frame — you know, nations just don't have that financial capacity. So we worked with the federal and provincial governments to try and backstop us ... but we just weren't getting any support there. That was unfortunate.”